Huge Potential for Collaboration

Despite facing challenges, the Western Balkan region must commit itself steadfastly to the green transition, as backtracking isn’t sustainable when it comes to energy security or environmental wellbeing

A thorough understanding of the Green Agenda for the Western Balkans (GAWB), which is akin to the European Green Deal, is crucial for our region’s journey towards sustainable growth and climate neutrality, says Regional Cooperation Council Secretary General Majlinda Bregu. “Common action” is key when it comes to bringing the Western Balkans closer to this goal.

When discussing the Western Balkans, you often emphasise the presence of a “vast area of common action” in the region, primarily in the field of economics. In which areas has this assertion proven most significant to date?

― In the Western Balkans, which is a region of some 18 million people fragmented into six smaller markets, the “common action” concept is not only sensible, but the only viable concept if we want to be competitive on the EU single market, but also globally. When it comes to the economic domain, the Common Regional Market (CRM) Action Plan, which the RCC is facilitating and coordinating, has made significant strides across multiple areas.

The most notable achievements are the groundbreaking mobility agreements, fostering a dynamic and interconnected regional labour market, because without the free flow of people – to travel, study and work – coupled with the free flow of goods and capital, there is no shared market. Furthermore, collaborative efforts aimed at advancing investment policy reforms, such as the endorsement of regional standards for negotiating International Investment Agreements (IIAs) and joint investment promotion efforts, including support for participation in investor generation activities, have catalysed the region’s surge in FDI, which soared by almost 40% in recent years, hitting a record high of €8.7 billion in 2022.

Furthermore, the implementation of green lanes represents another success, enhancing trade facilitation by reducing waiting times at border crossings significantly – cumulatively saving over 77,440 hours, or more than 3,200 days. Additionally, the region’s economies have cooperated effectively to move closer to the Single Euro Payments Area (SEPA), aiming to make payment transactions as swift and cost-effective as possible within the economies, because SEPA can generate annual benefits of up to €500 million.

These are just a few examples among the many that highlight the presence of common action and underscore the huge potential for such collaboration in the Western Balkans’ economic sphere. We are currently preparing the CRM2, which will build on the existing achievements and further actions even more, so the region will subsequently be able to phase into the European Single Market.

How prepared are the economies of the Western Balkans for the energy transition and economic progress aligned with the EU Green Deal? Can this transition, which is seen as requiring substantial resources, be accomplished without EU support?

― A deep understanding of the Green Agenda for the Western Balkans (GAWB), which is akin to the European Green Deal, is crucial for our region’s journey towards sustainable growth and climate neutrality.

Despite sharing the goal of achieving climate neutrality by 2030, the region grapples with challenges such as outdated infrastructure, dependence on coal and economic limitations, costing us thousands of lives and between 6 and 11 billion euros annually. Energy transition is multifaceted and entails reducing carbon emissions, promoting renewables and energy efficiency, and phasing out fossil fuels. The EBRD’s estimated financial requirements of €30 billion for the region’s energy transition by 2030 only underscore the magnitude of the task.

However, policy and regulatory adjustments, like carbon taxation and circular economy models, can unlock trillions of euros annually and create 700,000 jobs by 2030 in the EU alone, which can be used to mitigate emissions and further drive energy transition. The Green Agenda must be viewed positively for its developmental opportunities, rather than being seen solely from a cost perspective.

We are in the process of preparing CRM2, which will build upon existing achievements and take further actions to facilitate the region’s transition into the European Single Market

The EU’s €1.8 billion Energy Support Package and €6 billion Growth Plan prioritise decarbonisation and provide essential funding. However, approximately 52% of investments should target cost-competitive renewables, mainly financed by the private sector, while 42% are expected to be funded by governments, private investments and multilateral development banks.

Strong collaboration with informed strategies among all stakeholders is crucial, with early integration into pertinent policies and alignment with EU standards in order to bridge the convergence gap and secure a sustainable future for the Western Balkans. Despite challenges, the region must remain committed to the green transition, as backtracking is not viable for either energy security or environmental sustainability.

Research on the attitudes of Western Balkan citizens, regularly conducted for the needs of the RCC, has shown their concerns regarding corruption and crime. How crucial are strong institutions and the rule of law for the successful implementation of these reforms?

― The key issue here is trust. People in our region do not have a high level of trust in their institutions. According to our annual Balkan Barometer survey, the highest distrust is towards political parties, with 75%, followed closely by judiciaries, with 69%, government and media, both with 62%, and law enforcement, with 61%. So, distrust is overwhelming, which is also indicative in the Corruption Perception Index that was published just recently, with all of the Western Balkan economies ranking high on the scale. Even though this index does not represent the actual level of corruption, which can be higher or lower, the perception of corruption is still intense.

The Balkan Barometer reveals that, year after year, corruption – together with the economic situation and unemployment – remains among the top three concerns of our citizens. Moreover, 55% believe corruption has increased. We find a similar situation with perceptions of crime, with 60% of citizens ranking organised crime as their top security concern. This distrust, which we have been tracking for almost a decade through our Balkan Barometer and SecuriMeter public opinion surveys, shows no signs of reducing; quite the opposite, in fact.

Corruption and crime undermine core democratic values, with serious implications for the rule of law, economic stability, social justice and the overall development and EU accession aspirations of our region. Therefore, strong institutions that have integrity and accountability, and stand committed to upholding the rule of law and promoting transparency and good governance, are crucial in providing adequate responses in fighting both corruption and crime. However, this should not be seen as only being the duty of the institutions themselves. There is no single success factor. An effective fight against organised crime, and particularly corruption, also requires a shift in our social culture and increased ethical and civil commitment.